Matrix Service Company (Nasdaq: MTRX), a leading
contractor to the energy and industrial markets across North
America, today reported financial results for its second quarter of
fiscal 2022.
Key highlights:
- Project
awards of $192.2 million in the quarter resulting in a book-to-bill
of 1.2; project awards through first half of fiscal 2022 have
surpassed project awards for the full year of fiscal
2021
- Recent
notable awards include the engineering, fabrication and
construction of seven renewable fuel storage tanks,
upgrade projects at two separate refineries to allow
processing of renewable diesel and a capital
project for a midstream gas processing plant
- Backlog
increased to $591.6 million, an increase of 28% compared to the
start of the fiscal year
- Strong
balance sheet with liquidity of $101.7 million compared to $66.8
million last quarter and no debt
- Second
quarter revenue of $162.0 million and loss per fully diluted share
of $0.93; adjusted loss per fully diluted share of
$0.38(1), excluding a valuation
allowance on a deferred tax asset and the impact of restructuring
costs;
- Announced
the addition of senior-level personnel to the business development
team, adding expertise and relationships to support our growth and
market position in hydrogen and renewable energy
- Joined the
Hydrogen Council, a global CEO-led coalition of more than 130
companies working to accelerate the energy transition through
hydrogen
“Our second consecutive quarter with a
book-to-bill above 1.0 and backlog growth reflects the growing
momentum in our business,” said John R. Hewitt, President and CEO.
“Importantly, some of our larger awards this year are for projects
that support the transition of energy markets to renewable fuels
and other clean energy sources, a trend that will benefit Matrix.
We are also winning projects across the diverse end markets in
which we operate and making good progress in the strategic chemical
and petrochemical markets. Matrix is very well-positioned to
capture projects and market share through both the recovery and the
evolution of our end markets."
“Additionally, following the substantial
completion of the first phase of our business improvement plan,
which reduced our cost structure by approximately $80 million, we
remain focused on increasing the efficiency of the organization
and, in phase two, are making further enhancements. These
enhancements will result in better use of shared services and a
Center of Excellence that will be focused on optimizing safety,
quality, and procurement, as well as other operational areas across
the organization. The end result will be an optimized and efficient
organization to support the company's growth plan.”
Earnings Summary
Revenue in the second quarter of fiscal 2022 was
$162.0 million, a decrease of $6.1 million compared to first
quarter fiscal 2022 revenue of $168.1 million. Gross margin was
2.0% in the second quarter of fiscal 2022. Despite significant
reductions in our cost structure, revenue volumes did not support
the complete recovery of construction overhead. Based on improving
market conditions and strong award activity, we expect our lower
cost base along with improving revenue volumes to support
sequential quarterly improvement and return to profitability in the
fourth quarter of 2022.
In the Storage and Terminals Solutions segment,
a gross margin (loss) of (0.3)% for the quarter was primarily the
result of lower than previously forecasted margin on a thermal
energy storage tank repair and maintenance project due to changes
in repair scope, expanded client weld testing and associated
schedule delays, which reduced segment gross profit by $2.8
million. Additionally, low revenue volumes led to the under
recovery of construction overhead costs, which also impacted gross
margin.
We had strong project execution in our Process
and Industrial Facilities segment, with direct margins of 13.4%,
although low revenue volumes led to the under recovery of
construction overhead costs, which resulted in a segment gross
margin of 8.4%. We booked $210.4 million of project awards in the
first half of fiscal 2022, which includes some large capital
projects that are still in the preliminary stages of engineering
and construction. As such, we expect strong revenue growth in this
segment during the second half of fiscal 2022.
In the Utility and Power Infrastructure segment,
second quarter gross margin (loss) was (0.9)% due to lower margins
on competitively bid power delivery work and revenue recognized on
a large capital project at a margin reduced in prior periods.
Segment gross margin was also negatively impacted by low volumes,
which led to the under recovery of construction overhead.
In addition, earnings in the second quarter
included a $14.2 million valuation allowance placed on our
deferred tax assets during the second quarter. We also incurred
restructuring costs of $0.7 million as we continue to implement our
previously announced business improvement plan. The current phase
of our plan is focused on the consolidation of transactional
services, procedures and operational talent to increase our
efficiency, competitiveness and profitability. Since we implemented
the plan in fiscal 2020, we estimate that we have reduced our cost
structure by approximately $80 million, or approximately 29%, with
approximately one third of those reductions related to SG&A and
the rest related to construction overhead, which is included in
cost of revenue in the Condensed Consolidated Statements of
Income.
Backlog
Our backlog as of December 31, 2021 was $591.6
million. Strong bidding activity has led to project awards of
$192.2 million and $459.1 million during the three and six months
ended December 31, 2021, respectively, leading to book-to-bill
ratios of 1.2 and 1.4 for the three and six-month periods. Project
awards through the first half of fiscal 2022 have surpassed project
awards for the full year of fiscal 2021. On a segment basis, the
second quarter book-to-bill was 0.5 for Utility and Power
Infrastructure (0.8 year-to-date), driven largely by bookings in
electrical infrastructure. For Process and Industrial Facilities,
the book-to-bill was 2.3 (2.2 year-to-date) led by the awards of a
midstream natural gas plant engineering project and a biodiesel
renewable fuels capital project. For Storage and Terminal
Solutions, the quarterly book-to-bill was 0.8 (1.3 year-to-date)
led by midstream storage and other renewables projects. Bidding
activity is strong, and while the timing of project awards can
fluctuate, we expect the trend of improving backlog to
continue.
The table below summarizes our awards, book-to-bill ratios and
backlog by segment for our second fiscal quarter and year-to-date
(in thousands, except for book-to-bill ratios):
|
|
Three Months Ended December 31,
2021 |
|
Six Months Ended December 31,
2021 |
|
Backlog as of December 31, 2021 |
Segment: |
|
Awards |
|
Book-to-Bill |
|
Awards |
|
Book-to-Bill |
|
Utility and Power Infrastructure |
|
$ |
28,244 |
|
0.5 |
|
$ |
92,281 |
|
0.8 |
|
$ |
150,368 |
Process and Industrial Facilities |
|
|
115,852 |
|
2.3 |
|
|
210,414 |
|
2.2 |
|
|
250,970 |
Storage and Terminal Solutions |
|
|
48,074 |
|
0.8 |
|
|
156,362 |
|
1.3 |
|
|
190,222 |
Total |
|
$ |
192,170 |
|
1.2 |
|
$ |
459,057 |
|
1.4 |
|
$ |
591,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Position
At December 31, 2021, we had no debt and total
liquidity of $101.7 million. Liquidity is comprised of $65.0
million of unrestricted cash and cash equivalents and $36.7 million
of borrowing availability under the ABL Facility. In addition, the
Company has $27.6 million of restricted cash, of which $25.0
million is restricted to support the ABL Facility and $2.6 million
is restricted to support a purchase card program associated with a
prior card administrator while we transition to a new card
administrator. We expect our liquidity to improve further in the
third quarter as letters of credit have been reduced by $9.8
million in January 2022.
(1)Non-GAAP
Financial Measure
Adjusted loss per share is a non-GAAP financial
measure which excludes the financial impact of a valuation
allowance placed on our deferred tax assets, the accelerated
amortization of deferred debt amendment fees associated with the
prior credit agreement and restructuring costs. See the Non-GAAP
Financial Measures section included at the end of this release for
a reconciliation to loss per share.
Conference Call Details
In conjunction with the earnings release, Matrix
Service Company will host a conference call / webcast with John R.
Hewitt, President and CEO, and Kevin S. Cavanah, Vice President and
CFO. The call will take place at 10:30 a.m. (Eastern) / 9:30 a.m.
(Central) on Tuesday, February 8, 2022 and will be simultaneously
broadcast live over the Internet which can be accessed at our
website at matrixservicecompany.com under Investor Relations,
Events and Presentations. Please allow extra time prior to the call
to visit the site and download the streaming media software
required to listen to the Internet broadcast. The conference call
will be recorded and will be available for replay within one hour
of completion of the live call and can be accessed following the
same link as the live call.
Dial in - Toll-Free 1-888-660-6127Dial in - Toll
1-973-890-8355Audience Passcode 7162239
About Matrix Service Company
Matrix Service Company (Nasdaq: MTRX), through
its subsidiaries, is a leading North American industrial
engineering and construction contractor headquartered in Tulsa,
Oklahoma with offices located throughout the United States and
Canada, as well as Sydney, Australia and Seoul, South Korea.
The Company reports its financial results in
three key operating segments: Utility and Power Infrastructure,
Process and Industrial Facilities, and Storage and Terminal
Solutions.
With a focus on sustainability, building strong
Environment, Social and Governance (ESG) practices, and living our
core values, Matrix ranks among the Top Contractors by
Engineering-News Record, was recognized for its Board
diversification, is an active signatory to CEO Action for Diversity
and Inclusion, and is consistently recognized as a Great Place to
Work®. To learn more about Matrix Service Company, visit
matrixservicecompany.com and read our inaugural Sustainability
Report.
This release contains forward-looking statements
that are made in reliance upon the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
are generally accompanied by words such as “anticipate,”
“continues,” “expect,” “forecast,” “outlook,” “believe,”
“estimate,” “should” and “will” and words of similar effect that
convey future meaning, concerning the Company’s operations,
economic performance and management’s best judgment as to what may
occur in the future. Future events involve risks and uncertainties
that may cause actual results to differ materially from those we
currently anticipate. The actual results for the current and future
periods and other corporate developments will depend upon a number
of economic, competitive and other influences, including the
successful implementation of the Company's business improvement
plan and the factors discussed in the “Risk Factors” and “Forward
Looking Statements” sections and elsewhere in the Company’s reports
and filings made from time to time with the Securities and Exchange
Commission. Many of these risks and uncertainties are beyond the
control of the Company, and any one of which, or a combination of
which, could materially and adversely affect the results of the
Company's operations and its financial condition. We undertake no
obligation to update information contained in this release, except
as required by law.
For more information, please contact:
Kevin S. CavanahVice President and CFOT:
918-838-8822Email:kcavanah@matrixservicecompany.com
Kellie SmytheSenior Director, Investor RelationsT:
918-359-8267Email: ksmythe@matrixservicecompany.com
Matrix Service
CompanyCondensed Consolidated Statements of
Income(unaudited)(In thousands,
except per share data)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31,2021 |
|
December 31,2020 |
|
December 31,2021 |
|
December 31,2020 |
Revenue |
|
$ |
161,965 |
|
|
$ |
167,468 |
|
|
$ |
330,058 |
|
|
$ |
350,239 |
|
Cost of
revenue |
|
|
158,758 |
|
|
|
152,155 |
|
|
|
330,359 |
|
|
|
320,576 |
|
Gross
profit (loss) |
|
|
3,207 |
|
|
|
15,313 |
|
|
|
(301 |
) |
|
|
29,663 |
|
Selling,
general and administrative expenses |
|
|
15,922 |
|
|
|
16,724 |
|
|
|
32,551 |
|
|
|
34,852 |
|
Restructuring costs |
|
|
695 |
|
|
|
5,045 |
|
|
|
1,300 |
|
|
|
4,725 |
|
Operating loss |
|
|
(13,410 |
) |
|
|
(6,456 |
) |
|
|
(34,152 |
) |
|
|
(9,914 |
) |
Other
income (expense): |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(502 |
) |
|
|
(358 |
) |
|
|
(2,501 |
) |
|
|
(733 |
) |
Interest income |
|
|
29 |
|
|
|
38 |
|
|
|
50 |
|
|
|
71 |
|
Other |
|
|
(60 |
) |
|
|
973 |
|
|
|
(143 |
) |
|
|
2,006 |
|
Loss
before income tax expense (benefit) |
|
|
(13,943 |
) |
|
|
(5,803 |
) |
|
|
(36,746 |
) |
|
|
(8,570 |
) |
Provision (benefit) for federal, state and foreign income
taxes |
|
|
10,976 |
|
|
|
(1,212 |
) |
|
|
5,711 |
|
|
|
(942 |
) |
Net
loss |
|
$ |
(24,919 |
) |
|
$ |
(4,591 |
) |
|
$ |
(42,457 |
) |
|
$ |
(7,628 |
) |
|
|
|
|
|
|
|
|
|
Basic
loss per common share |
|
$ |
(0.93 |
) |
|
$ |
(0.17 |
) |
|
$ |
(1.59 |
) |
|
$ |
(0.29 |
) |
Diluted
loss per common share |
|
$ |
(0.93 |
) |
|
$ |
(0.17 |
) |
|
$ |
(1.59 |
) |
|
$ |
(0.29 |
) |
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
26,749 |
|
|
|
26,489 |
|
|
|
26,680 |
|
|
|
26,377 |
|
Diluted |
|
|
26,749 |
|
|
|
26,489 |
|
|
|
26,680 |
|
|
|
26,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matrix Service
CompanyCondensed Consolidated Balance
Sheets(unaudited)(In
thousands)
|
December 31,2021 |
|
June 30,2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
65,040 |
|
|
$ |
83,878 |
|
Restricted cash |
|
2,600 |
|
|
|
— |
|
Accounts receivable, less allowances (December 31, 2021—$547 and
June 30, 2021—$898) |
|
121,601 |
|
|
|
148,030 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
34,503 |
|
|
|
30,774 |
|
Inventories |
|
6,297 |
|
|
|
7,342 |
|
Income taxes receivable |
|
16,236 |
|
|
|
16,965 |
|
Other current assets |
|
8,460 |
|
|
|
4,230 |
|
Total current assets |
|
254,737 |
|
|
|
291,219 |
|
Property, plant and equipment
at cost: |
|
|
|
Land and buildings |
|
41,545 |
|
|
|
41,633 |
|
Construction equipment |
|
94,091 |
|
|
|
94,453 |
|
Transportation equipment |
|
50,051 |
|
|
|
50,510 |
|
Office equipment and software |
|
43,062 |
|
|
|
42,706 |
|
Construction in progress |
|
282 |
|
|
|
493 |
|
Total property, plant and equipment - at cost |
|
229,031 |
|
|
|
229,795 |
|
Accumulated depreciation |
|
(166,296 |
) |
|
|
(160,388 |
) |
Property, plant and equipment - net |
|
62,735 |
|
|
|
69,407 |
|
Restricted cash,
non-current |
|
25,000 |
|
|
|
— |
|
Operating lease right-of-use
assets |
|
20,414 |
|
|
|
22,412 |
|
Goodwill |
|
60,546 |
|
|
|
60,636 |
|
Other intangible assets, net
of accumulated amortization |
|
5,660 |
|
|
|
6,614 |
|
Deferred income taxes |
|
— |
|
|
|
5,295 |
|
Other assets |
|
11,472 |
|
|
|
11,973 |
|
Total assets |
$ |
440,564 |
|
|
$ |
467,556 |
|
|
|
|
|
|
|
|
|
Matrix Service
CompanyCondensed Consolidated Balance Sheets
(continued)(unaudited)(In
thousands, except share data)
|
December 31,2021 |
|
June 30,2021 |
Liabilities and
stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
55,953 |
|
|
$ |
60,920 |
|
Billings on uncompleted contracts in excess of costs and estimated
earnings |
|
84,859 |
|
|
|
53,832 |
|
Accrued wages and benefits |
|
15,968 |
|
|
|
21,008 |
|
Accrued insurance |
|
6,175 |
|
|
|
6,568 |
|
Operating lease liabilities |
|
5,364 |
|
|
|
5,747 |
|
Other accrued expenses |
|
5,610 |
|
|
|
5,327 |
|
Total current liabilities |
|
173,929 |
|
|
|
153,402 |
|
Deferred income taxes |
|
33 |
|
|
|
34 |
|
Operating lease liabilities |
|
18,925 |
|
|
|
20,771 |
|
Other liabilities |
|
2,067 |
|
|
|
7,810 |
|
Total liabilities |
|
194,954 |
|
|
|
182,017 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock—$.01 par value; 60,000,000 shares authorized;
27,888,217 shares issued as of December 31, 2021 and June 30, 2021;
26,773,975 and 26,549,438 shares outstanding as of December 31,
2021 and June 30, 2021 |
|
279 |
|
|
|
279 |
|
Additional paid-in capital |
|
135,913 |
|
|
|
137,575 |
|
Retained earnings |
|
132,721 |
|
|
|
175,178 |
|
Accumulated other comprehensive loss |
|
(7,445 |
) |
|
|
(6,749 |
) |
|
|
261,468 |
|
|
|
306,283 |
|
Less: Treasury stock, at cost — 1,114,242 shares as of December 31,
2021, and 1,338,779 shares as of June 30, 2021 |
|
(15,858 |
) |
|
|
(20,744 |
) |
Total stockholders'
equity |
|
245,610 |
|
|
|
285,539 |
|
Total liabilities and
stockholders’ equity |
$ |
440,564 |
|
|
$ |
467,556 |
|
|
|
|
|
|
|
|
|
Matrix Service
CompanyResults of
Operations(unaudited)(In
thousands)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31,2021 |
|
December 31,2020 |
|
December 31,2021 |
|
December 31,2020 |
Gross
revenue |
|
|
|
|
|
|
|
|
Utility and Power Infrastructure |
|
$ |
54,752 |
|
|
$ |
52,023 |
|
|
$ |
111,956 |
|
|
$ |
112,694 |
|
Process and Industrial
Facilities |
|
|
52,037 |
|
|
|
51,747 |
|
|
|
97,247 |
|
|
|
98,475 |
|
Storage and Terminal
Solutions |
|
|
57,607 |
|
|
|
65,434 |
|
|
|
125,919 |
|
|
|
143,030 |
|
Total gross revenue |
|
$ |
164,396 |
|
|
$ |
169,204 |
|
|
$ |
335,122 |
|
|
$ |
354,199 |
|
Less: Inter-segment
revenue |
|
|
|
|
|
|
|
|
Process and Industrial
Facilities |
|
$ |
1,721 |
|
|
$ |
485 |
|
|
$ |
3,026 |
|
|
$ |
1,282 |
|
Storage and Terminal
Solutions |
|
|
710 |
|
|
|
1,251 |
|
|
|
2,038 |
|
|
|
2,678 |
|
Total inter-segment
revenue |
|
$ |
2,431 |
|
|
$ |
1,736 |
|
|
$ |
5,064 |
|
|
$ |
3,960 |
|
Consolidated
revenue |
|
|
|
|
|
|
|
|
Utility and Power
Infrastructure |
|
$ |
54,752 |
|
|
$ |
52,023 |
|
|
$ |
111,956 |
|
|
$ |
112,694 |
|
Process and Industrial
Facilities |
|
|
50,316 |
|
|
|
51,262 |
|
|
|
94,221 |
|
|
|
97,193 |
|
Storage and Terminal
Solutions |
|
|
56,897 |
|
|
|
64,183 |
|
|
|
123,881 |
|
|
|
140,352 |
|
Total consolidated
revenue |
|
$ |
161,965 |
|
|
$ |
167,468 |
|
|
$ |
330,058 |
|
|
$ |
350,239 |
|
Gross profit
(loss) |
|
|
|
|
|
|
|
|
Utility and Power
Infrastructure |
|
$ |
(491 |
) |
|
$ |
5,597 |
|
|
$ |
(6,598 |
) |
|
$ |
12,510 |
|
Process and Industrial
Facilities |
|
|
4,235 |
|
|
|
7,864 |
|
|
|
7,106 |
|
|
|
11,523 |
|
Storage and Terminal
Solutions |
|
|
(172 |
) |
|
|
1,852 |
|
|
|
241 |
|
|
|
5,630 |
|
Corporate |
|
|
(365 |
) |
|
|
— |
|
|
|
(1,050 |
) |
|
|
— |
|
Total gross profit (loss) |
|
$ |
3,207 |
|
|
$ |
15,313 |
|
|
$ |
(301 |
) |
|
$ |
29,663 |
|
Selling, general and
administrative expenses |
|
|
|
|
|
|
|
|
Utility and Power
Infrastructure |
|
$ |
3,150 |
|
|
$ |
2,576 |
|
|
$ |
6,200 |
|
|
$ |
4,798 |
|
Process and Industrial
Facilities |
|
|
2,792 |
|
|
|
3,387 |
|
|
|
5,554 |
|
|
|
7,437 |
|
Storage and Terminal
Solutions |
|
|
4,280 |
|
|
|
3,919 |
|
|
|
8,786 |
|
|
|
9,062 |
|
Corporate |
|
|
5,700 |
|
|
|
6,842 |
|
|
|
12,011 |
|
|
|
13,555 |
|
Total selling, general and
administrative expenses |
|
$ |
15,922 |
|
|
$ |
16,724 |
|
|
$ |
32,551 |
|
|
$ |
34,852 |
|
Restructuring
costs |
|
|
|
|
|
|
|
|
Utility and Power
Infrastructure |
|
$ |
37 |
|
|
$ |
812 |
|
|
$ |
46 |
|
|
$ |
823 |
|
Process and Industrial
Facilities |
|
|
(24 |
) |
|
|
3,364 |
|
|
|
(17 |
) |
|
|
2,864 |
|
Storage and Terminal
Solutions |
|
|
107 |
|
|
|
641 |
|
|
|
74 |
|
|
|
654 |
|
Corporate |
|
|
575 |
|
|
|
228 |
|
|
|
1,197 |
|
|
|
384 |
|
Total Restructuring costs |
|
$ |
695 |
|
|
$ |
5,045 |
|
|
$ |
1,300 |
|
|
$ |
4,725 |
|
Operating income
(loss) |
|
|
|
|
|
|
|
|
Utility and Power
Infrastructure |
|
$ |
(3,678 |
) |
|
$ |
2,209 |
|
|
$ |
(12,844 |
) |
|
$ |
6,889 |
|
Process and Industrial
Facilities |
|
|
1,467 |
|
|
|
1,113 |
|
|
|
1,569 |
|
|
|
1,222 |
|
Storage and Terminal
Solutions |
|
|
(4,559 |
) |
|
|
(2,708 |
) |
|
|
(8,619 |
) |
|
|
(4,086 |
) |
Corporate |
|
|
(6,640 |
) |
|
|
(7,070 |
) |
|
|
(14,258 |
) |
|
|
(13,939 |
) |
Total operating loss |
|
$ |
(13,410 |
) |
|
$ |
(6,456 |
) |
|
$ |
(34,152 |
) |
|
$ |
(9,914 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog
We define backlog as the total dollar amount of
revenue that we expect to recognize as a result of performing work
that has been awarded to us through a signed contract, limited
notice to proceed or other type of assurance that we consider firm.
The following arrangements are considered firm:
- fixed-price awards;
- minimum customer commitments on cost plus arrangements;
and
- certain time and material arrangements in which the estimated
value is firm or can be estimated with a reasonable amount of
certainty in both timing and amounts.
For long-term maintenance contracts with no
minimum commitments and other established customer agreements, we
include only the amounts that we expect to recognize as revenue
over the next 12 months. For arrangements in which we have received
a limited notice to proceed ("LNTP"), we include the entire scope
of work in our backlog if we conclude that the likelihood of the
full project proceeding as high. For all other arrangements, we
calculate backlog as the estimated contract amount less revenue
recognized as of the reporting date.
The following table provides a summary of changes in our backlog
for the three months ended December 31, 2021:
|
Utility and Power Infrastructure |
|
Process and Industrial Facilities |
|
Storage and
TerminalSolutions |
|
Total |
|
(In thousands) |
Backlog as of September 30, 2021 |
$ |
176,876 |
|
|
$ |
185,434 |
|
|
$ |
199,045 |
|
|
$ |
561,355 |
|
Project
awards |
|
28,244 |
|
|
|
115,852 |
|
|
|
48,074 |
|
|
|
192,170 |
|
Revenue
recognized |
|
(54,752 |
) |
|
|
(50,316 |
) |
|
|
(56,897 |
) |
|
|
(161,965 |
) |
Backlog
as of December 31, 2021 |
$ |
150,368 |
|
|
$ |
250,970 |
|
|
$ |
190,222 |
|
|
$ |
591,560 |
|
Book-to-bill ratio(1) |
|
0.5 |
|
|
|
2.3 |
|
|
|
0.8 |
|
|
|
1.2 |
|
____________ |
(1) |
Calculated by dividing project awards by revenue recognized during
the period. |
|
|
The following table provides a summary of
changes in our backlog for the six months ended December 31,
2021:
|
Utility and Power Infrastructure |
|
Process and Industrial Facilities |
|
Storage and
TerminalSolutions |
|
Total |
|
(In thousands) |
Backlog as of June 30, 2021 |
$ |
170,043 |
|
|
$ |
134,777 |
|
|
$ |
157,741 |
|
|
$ |
462,561 |
|
Project
awards |
|
92,281 |
|
|
|
210,414 |
|
|
|
156,362 |
|
|
|
459,057 |
|
Revenue
recognized |
|
(111,956 |
) |
|
|
(94,221 |
) |
|
|
(123,881 |
) |
|
|
(330,058 |
) |
Backlog
as of December 31, 2021 |
$ |
150,368 |
|
|
$ |
250,970 |
|
|
$ |
190,222 |
|
|
$ |
591,560 |
|
Book-to-bill ratio(1) |
|
0.8 |
|
|
|
2.2 |
|
|
|
1.3 |
|
|
|
1.4 |
|
____________ |
(1) |
Calculated by dividing project awards by revenue recognized during
the period. |
|
|
Non-GAAP Financial Measures
In order to more clearly depict our core
profitability, the following tables present our operating results
after certain adjustments:
Reconciliation of Adjusted Net Loss and
Diluted Loss per Common
Share(1)(In thousands, except per
share data)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
Net loss, as reported |
|
$ |
(24,919 |
) |
|
$ |
(4,591 |
) |
|
$ |
(42,457 |
) |
|
$ |
(7,628 |
) |
Restructuring costs incurred |
|
|
695 |
|
|
|
5,045 |
|
|
|
1,300 |
|
|
|
4,725 |
|
Accelerated amortization of deferred debt amendment fees(2) |
|
|
— |
|
|
|
— |
|
|
|
1,518 |
|
|
|
— |
|
Deferred tax asset valuation allowance(3) |
|
|
14,198 |
|
|
|
— |
|
|
|
14,198 |
|
|
|
— |
|
Tax impact of restructuring costs and accelerated amortization of
debt amendment fees |
|
|
(179 |
) |
|
|
(1,299 |
) |
|
|
(725 |
) |
|
|
(1,217 |
) |
Adjusted net loss |
|
$ |
(10,205 |
) |
|
$ |
(845 |
) |
|
$ |
(26,166 |
) |
|
$ |
(4,120 |
) |
|
|
|
|
|
|
|
|
|
Loss per fully diluted share,
as reported |
|
$ |
(0.93 |
) |
|
$ |
(0.17 |
) |
|
$ |
(1.59 |
) |
|
$ |
(0.29 |
) |
Adjusted loss per fully
diluted share |
|
$ |
(0.38 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.98 |
) |
|
$ |
(0.16 |
) |
____________ |
(1) |
This table presents non-GAAP financial measures of our adjusted net
loss and adjusted diluted loss per common share for the three and
six months ended December 31, 2021 and 2020. The most directly
comparable financial measures are net loss and net loss per diluted
share, respectively, presented in the Condensed Consolidated
Statements of Income. We have presented these non-GAAP financial
measures because we believe they more clearly depict our core
operating results during the periods presented and provide a more
comparable measure of our operating results to other companies
considered to be in similar businesses. Since adjusted net loss and
adjusted diluted loss per common share are not measures of
performance calculated in accordance with GAAP, they should be
considered in addition to, rather than as a substitute for, the
most directly comparable GAAP financial measures. |
(2) |
Interest expense in fiscal 2022 included $1.5 million of
accelerated amortization of deferred debt amendment fees associated
with the termination of our credit agreement with JPMorgan Chase
Bank, N.A. |
(3) |
In determining the need for a valuation allowance on deferred tax
assets, the accounting standards provide that the existence of a
cumulative loss over a three-year period generally precludes the
use of management’s projections of future taxable income.
Consequently, we have recorded a full valuation allowance against
the deferred tax assets in the U.S. taxable jurisdiction in the
amount of $14.2 million. These assets are primarily comprised
of federal net operating losses, which have an indefinite
carryforward, federal tax credits and those state net operating
losses for which a valuation allowance did not previously exist. To
the extent the Company generates taxable income in the future, or
cumulative losses are no longer present and our future projections
for growth or tax planning strategies are demonstrated, we will
realize the benefit associated with the net operating losses for
which the valuation allowance has been provided. |
|
|
Reconciliation of Net Loss to Adjusted
EBITDA(1)
|
Three Months Ended |
|
Six Months Ended |
|
December 31,2021 |
|
December 31,2020 |
|
December 31,2021 |
|
December 31,2020 |
|
(In thousands) |
Net loss |
$ |
(24,919 |
) |
|
$ |
(4,591 |
) |
|
$ |
(42,457 |
) |
|
$ |
(7,628 |
) |
Restructuring costs |
|
695 |
|
|
|
5,045 |
|
|
|
1,300 |
|
|
|
4,725 |
|
Stock-based compensation |
|
1,866 |
|
|
|
1,981 |
|
|
|
3,735 |
|
|
|
4,199 |
|
Interest expense |
|
502 |
|
|
|
358 |
|
|
|
2,501 |
|
|
|
733 |
|
Provision (benefit) for income
taxes |
|
10,976 |
|
|
|
(1,212 |
) |
|
|
5,711 |
|
|
|
(942 |
) |
Depreciation and
amortization |
|
3,789 |
|
|
|
4,648 |
|
|
|
7,841 |
|
|
|
9,287 |
|
Adjusted EBITDA |
$ |
(7,091 |
) |
|
$ |
6,229 |
|
|
$ |
(21,369 |
) |
|
$ |
10,374 |
|
____________ |
(1) |
This table presents Adjusted EBITDA, which we define as net loss
before impairment of goodwill and other intangible assets,
restructuring costs, stock-based compensation expense, interest
expense, income taxes, and depreciation and amortization, because
it is used by the financial community as a method of measuring our
performance and of evaluating the market value of companies
considered to be in similar businesses. We believe that the line
item on our Consolidated Statements of Income entitled “Net loss”
is the most directly comparable GAAP measure to Adjusted EBITDA.
Since Adjusted EBITDA is not a measure of performance calculated in
accordance with GAAP, it should not be considered in isolation of,
or as a substitute for, net earnings as an indicator of operating
performance. Adjusted EBITDA, as we calculate it, may not be
comparable to similarly titled measures employed by other
companies. In addition, this measure is not a measure of our
ability to fund our cash needs. As Adjusted EBITDA excludes certain
financial information compared with net loss, the most directly
comparable GAAP financial measure, users of this financial
information should consider the type of events and transactions
that are excluded. Adjusted EBITDA has certain material limitations
as follows: |
- It does not include impairments to goodwill and other
intangible assets. While impairments to intangible assets are
non-cash expenses in the period recognized, cash or other
consideration was still transferred in exchange for the intangible
assets in the period of the acquisition. Any measure that excludes
impairments to intangible assets has material limitations since
these expenses represent the loss of an asset that was acquired in
exchange for cash or other assets.
- It does not include restructuring costs. Restructuring costs
represent material costs that we incurred and are oftentimes cash
expenses. Therefore, any measure that excludes restructuring costs
has material limitations.
- It does not include stock-based compensation. Stock-based
compensation represents material amounts of equity that are awarded
to our employees and directors for services rendered. While the
expense is non-cash, we release vested shares out of our treasury
stock, which has historically been replenished by using cash to
periodically repurchase our stock. Therefore, any measure that
excludes stock-based compensation has material limitations.
- It does not include interest expense. Because we have borrowed
money to finance our operations and to acquire businesses, pay
commitment fees to maintain our senior secured revolving credit
facility, and incur fees to issue letters of credit under the
senior secured revolving credit facility, interest expense is a
necessary and ongoing part of our costs and has assisted us in
generating revenue. Therefore, any measure that excludes interest
expense has material limitations.
- It does not include income taxes. Because the payment of income
taxes is a necessary and ongoing part of our operations, any
measure that excludes income taxes has material limitations.
- It does not include depreciation or amortization expense.
Because we use capital and intangible assets to generate revenue,
depreciation and amortization expense is a necessary element of our
cost structure. Therefore, any measure that excludes depreciation
or amortization expense has material limitations.
Matrix Service (NASDAQ:MTRX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Matrix Service (NASDAQ:MTRX)
Historical Stock Chart
From Apr 2023 to Apr 2024